2016 (3) TMI 1042 - AT - Central Excise

Entitlement to capital goods CENVAT Credit - capital goods credit denied on the ground that the same are used partially for producing electricity which is sold outside - Held that:- It can be seen that in the instant case the Capital Goods are not used exclusively for producing electricity that is wheeled out. The benefit of credit can not be denied to items namely, Sr No. 21, 42, 43, 61, 63, 65, 67 and 53 of the annexure B.Items at Sr. No. 22, 58 and 64 of the said annexure B are claimed to be capital goods. Learned counsel informed that Sr. No. 32 is G.I. Plates scrap; Sr. No. 58 is SHRINKKOMP-30 and Sr. No. 64 is FRP Motor Cover. He could, however, not give exact usage of these items. No reason is given for denying the credit on these items in the impugned order. Credit cannot be denied without reason arbitrarily.- Decided in favour of assessee

Non entitled to CENVAT Credit on the input services - claim denied as the plant was not set up with intention to captive consumption but also to the pre-set mind to sale electricity out of it for commercial consideration - Held that:- The Cenvat rules are common for both the inputs and for input services. Thus what the Hon'ble Supreme Court in Maruti Suzuki Ltd. [2009 (8) TMI 14 - SUPREME COURT ] has held in case of inputs will apply to the input services as well. In the instant case they have infact not availed entire credit but only the credit which is admissible to them in terms of Rule 6(2) of the Cenvat Credit Rules, 2004. In view of above we find that there is merit in the appeal filed by the appellants on this count. - Decided in favour of assessee

Non admissible service tax - demand under Rule 6(3)(i) of the Cenvat Credit Rules - the electricity generated from the plant does not attract Central Excise duty - Held that:- The rule 6(3) can be invoked only if it is found that the appellant has failed to follow the previous provisions of the said rule 6 of the Cenvat Credit Rules 2004. In this case the appellants have taken credit only to the extent of credit that is eligible to them as the demands of reversal credit themselves have been set aside. In such circumstances the rule 6(3)(i) of the Cenvat Credit Rules 2004 cannot be invoked. The said rule comes into play only when there is a wrong and excess availment of credit. As the appellant have been taking credit only to the extent eligible to them rule 6(3)(i) of the Cenvat Credit Rules 2004 cannot be invoked. - Decided in favour of assessee